Africa’s drive to boost intra-continental trade under the African Continental Free Trade Area (AfCFTA) could fall short of expectations unless governments, financial institutions and development partners address an estimated annual trade finance gap of between US$80 billion and US$120 billion.

This is the key warning contained in the 2026 African Trade Report released by Afreximbank, which identifies inadequate trade finance as one of the continent’s most significant structural obstacles to regional economic integration and industrialisation.

According to the report, although AfCFTA has created one of the world’s largest single markets, many African businesses remain unable to access the financing needed to take advantage of expanding cross-border trade opportunities.

Afreximbank noted that the financing shortfall is particularly affecting small and medium-sized enterprises, limiting their ability to obtain working capital, import production inputs, fulfil export contracts and expand into regional markets.

The report attributes the persistent financing gap to high sovereign risk perceptions, limited risk-bearing capacity among financial institutions, elevated transaction costs and weak credit infrastructure across many African economies.

It said these challenges continue to constrain private sector participation in regional trade despite ongoing efforts by African governments to deepen economic integration.

According to the report, while considerable progress has been made in reducing tariff barriers through AfCFTA, access to finance is rapidly emerging as the more significant obstacle to increasing trade among African countries.

Afreximbank stressed that achieving meaningful growth in intra-African trade will require policymakers to move beyond tariff liberalisation and focus on building stronger financial systems capable of supporting production, exports and cross-border commerce.

To help bridge the financing gap, the report recommends expanding trade finance facilities, increasing the use of credit guarantees and blended finance instruments, and strengthening the role of development finance institutions in mobilising private investment for trade-related projects.

It also called for greater investment in industrial ecosystems, digital trade infrastructure and efficient payment systems to improve the competitiveness of African businesses and reduce dependence on markets outside the continent.

The report identified the Pan-African Payment and Settlement System (PAPSS) as a key tool for promoting regional trade by reducing reliance on foreign currencies, lowering transaction costs and facilitating faster cross-border payments.

Afreximbank concluded that Africa’s trade challenge now extends beyond market access alone.

According to the report, the continent’s ability to unlock the full benefits of AfCFTA will increasingly depend on whether businesses can secure affordable financing to produce, transport and trade goods competitively across African markets.

It warned that unless the trade finance gap is significantly reduced, efforts to accelerate industrialisation, strengthen regional value chains and expand intra-African trade are likely to remain below their full potential.